Lawsuit Lending


Lawsuit lending is a financial practice that provides “up-front” cash to plaintiffs to cover immediate expenses during litigation. These loans typically come with sky-high interest rates and fees – as much as 200 percent – that can leave borrowers with little to no recovery. Repayment is dependent on the plaintiff recovering some sort of monetary compensation, through either a settlement or verdict. This unscrupulous business practice only leads to prolonged litigation and unjust recovery for a plaintiff and creates conflicts of interest that distort the fundamental nature of the civil justice system.  Read More...

Lawsuit lending can greatly alter a plaintiff’s decision-making process, leading them to reject a reasonable settlement offer for the chance at obtaining a higher verdict in court in order to pay off a high-interest loan. This jeopardizes the chance of any recovery, as litigation could result in a lower than expected verdict or a judgment in favor of the defendant. It also increases costs for defendants, who are forced to endure prolonged litigation.

There is also the ethical concern with inserting a third party into the case that compromises the interests of plaintiffs. It creates conflicts of interests for plaintiffs’ lawyers, who may develop referral relationships with certain lawsuit lenders and be expected to “steer” clients to those lenders.

ILR works to pass legislation that would provide safeguards against abusive lawsuits, and aims to provide transparency to all associated parties during litigation. Funding arrangements are often kept out of the public eye and hidden from parties and judges involved in litigation. The Litigation Funding Transparency Act would not only require third party litigation funding arrangements be disclosed during litigation, but also promote adequate recovery for plaintiffs and provide an overall unbiased civil justice system.

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All Results for Lawsuit Lending

  1. ILR Role in Lawsuit Lending Reform Noted in Story Highlighting TN Victory

    October 16, 2014 | News and Blog

    In a story highlighting awards given to two Tennessee state legislators for their role in passing a lawsuit lending reform bill in their state, the Insurance Journal highlights the U.S. Chamber Institute for Legal Reform's role in the national effort to regulate these lenders.... Read More

  2. In The News Today - August 25, 2014

    August 25, 2014 | News and Blog

    Similar in nature to "payday loans," lawsuit lending is increasingly coming under fire for its predatory imposition of high interest rates resulting in huge costs for consumers, "typically way beyond what's allowed for conventional loans."... Read More

  3. ILR Calls for Investigation into Lawsuit Lenders' Possible Violations of the Illinois Workers Compensation Act

    July 10, 2014 | News and Blog

    The Illinois Workers Compensation Act expressly prohibits assignment of any payment, claim, award or decision - which is why it is so concerning that various lawsuit lending firms are marketing and providing loans to workers compensation claimants in Illinois.... Read More

  4. Business Community Opposes Louisiana Legislation that Legitimizes Lawsuit Lending Industry

    May 28, 2014 | News and Blog

    The Louisiana House of Representatives is considering legislation - SB 299 - that, "creates the appearance of regulation, but really allows consumer lawsuit lenders to operate outside of Louisiana law," according to an alert issued by the Louisiana Association of Business and Industry (LABI).... Read More

  5. Tennessee Enacts Law to Rein in Lawsuit Lending Abuses

    April 30, 2014 | News and Blog

    Following Oklahoma last year, Tennessee yesterday became the second state nationally to enact a law to rein in lawsuit lending abuses.... Read More

  6. VIDEO: Fast Cash, Exorbitant Interest: States Act to Reign in Lawsuit Lenders

    April 29, 2014 | News and Blog

    Across the nation, individuals in need of funding to file lawsuits are falling victim to financial lenders who claim easy, fast cash.... Read More

  7. In the News Today - April 4, 2014

    April 04, 2014 | News and Blog

    Courts are taking a closer look at attorney fees in merger and acquisition lawsuits that often result in disclosure-only settlements.... Read More

  8. Tennessee House to Take Up Lawsuit Lending Bill

    March 27, 2014 | News and Blog

    Lawsuit lenders in Tennessee should be regulated like any other lender in the state says Yuri Cunza.... Read More

  9. OPINION: Lawsuit lenders should be regulated as other lenders

    March 26, 2014 | News and Blog

    The Tennessee House of Representatives is expected to consider the Tennessee Litigation Financing Consumer Protection Act in the next few days, a bill that protects consumers from predatory lending practices.... Read More

  10. Illinois: Stop the Unregulated March of the Lawsuit Lenders

    February 24, 2014 | News and Blog

    The Illinois General Assembly said 'No' to the lawsuit lending industry once before. They can again protect Illinois consumers by opposing the industry's latest proposal -- and then working to provide greater oversight and reasonable regulation of the lawsuit lenders.... Read More